LawFlash

DOJ’s Antitrust Division Convicts Fifth Extradited Foreign Executive

March 16, 2017

Five foreign executives have been extradited and convicted since 2010, reinforcing the Division’s continued emphasis on extradition in recent years.

On March 13, 2017, the Antitrust Division (Antitrust Division) of the US Department of Justice (DOJ) convicted its fifth foreign executive who was extradited to face charges in the United States. In the last three years, three foreign executives have been extradited and convicted by the Antitrust Division. The most recent case highlights the division’s continued focus on extradition and its efforts to convict foreign executives.

Recent Conviction: Extradition from Bulgaria

This latest conviction involved the extradition of an Israeli executive, Yuval Marshak, who was arrested during his travel in Bulgaria. On January 21, 2016, the Antitrust Division obtained a sealed indictment charging Marshak with defrauding the Foreign Military Financing (FMF) program and with money laundering related to “falsif[ying] bid documents to make it appear that certain FMF contracts had been competitively bid when they had not.” Under the FMF program, US funds are provided to foreign governments, including Israel, for the purchase of American-made military goods and services.

After obtaining a sealed arrest warrant, the DOJ requested an Interpol Red Notice, which allows participating countries to request the arrest of designated individuals who are traveling in other countries. Following his arrest in July 2016 during his travel to Bulgaria, on October 14, 2016, Marshak was extradited from Bulgaria,[1] and transported in custody to the US District Court for the District of Connecticut, where he was ordered detained.

On March 13, Marshak pled guilty to four counts: one count of mail fraud, two counts of wire fraud, and one count of major fraud against the United States. According to the DOJ and court records:

Marshak and others falsified bid documents to make it appear that certain FMF contracts had been competitively bid when they had not. Marshak further caused false certifications to be made to the US Department of Defense (DoD) stating that no commissions were being paid and no non-US content was used in these contracts, when, in fact, Marshak had arranged to receive commissions and to have services performed outside the United States, all in violation of the DoD’s rules and regulations.[2]

Marshak’s sentencing hearing is set for June 5, 2017. As is common in extradition cases, the Antitrust Division noted the international cooperation in the case including working “closely” with the government of Israel.

Other Extraditions

Given the Antitrust Division’s increased focus on extradition, the risk remains high for foreign executives facing charges in the United States.[3] Some key facts from the five extraditions by the Antitrust Division, summarized in the table below, can be highlighted:

Citizenship: The five extraditions have involved citizens from five countries: Canada, Israel (twice), Italy, the United Kingdom, and the United States (based on dual citizenship). Citizenship may be important since some countries (such as Germany) have laws that bar the extradition of their citizens. These types of laws may not apply to noncitizens traveling in other countries.

Basis for Convictions: Two of the extraditions resulted in convictions at trial, in 2010 and 2016, and three were based on convictions based on plea agreements, in 2012, 2014, and 2017.

Interpol Red Notice Arrests: For the two executives who were arrested as the result of Interpol Red Notices while traveling outside their countries of citizenship, the charges were filed under seal. Consequently there was no public information that charges were filed and pending.

Scope of Extraditable Offenses: Whether offenses are covered under the terms of the applicable extradition treaty often determines whether an individual may be subject to extradition. The Antitrust Division has taken an expansive approach in its charges in some of its cases. Four cases included convictions based on non–Sherman Act charges, which demonstrates the Antitrust Division’s ability to extradite executives on broader legal theories. Only two of the cases involved Sherman Act charges.

Antitrust Division Extraditions Since 2010

No.

Name/ Citizenship

Date/ Country of Extradition

Charges Originally Filed

Investigation

Resolution

Notes

1

Ian P. Norris/ British citizen

Mar. 23, 2010/United Kingdom

Sept. 24, 2003, original counts filed; superseding charges filed Oct. 15, 2003 included four counts: (1) conspiring to fix prices for certain carbon products sold in the United States (Sherman Act); (2) conspiring to obstruct justice; (3) corruptly persuading and attempting to corruptly persuade other persons with intent to influence their testimony; and (4) corruptly persuading other persons to alter, destroy, mutilate, or conceal documents with the intent to impair their availability for use in an official proceeding

Carbon Graphite investigation

Extradited from the UK to face prosecution on only Counts (2) through (4); July 27, 2010 trial conviction on one count of conspiring to obstruct justice; acquitted on remaining counts; sentenced to 18 months in prison, a three-year term of supervised release, and a $25,000 fine; conviction was affirmed on appeal

Fought extradition for six and a half years, contending that the charges were not covered under prior UK extradition law; conviction based on obstruction of justice charge and not Sherman Act charge

New York Presbyterian Hospital investigation concerning award of contracts

July 11, 2012, pled guilty as charged; sentenced to time served (just under one year) and a one-year term of supervised release with three months of home confinement, and ordered to pay a $7,500 fine and $78,980 in restitution

Apr. 24, 2014, pled guilty to sole Sherman Act count; sentenced to 24 months in prison (including credit for nine months and 16 days held in custody during extradition proceedings in Germany) and a $50,000 fine

Arrest warrant (under an Interpol Red Notice) based on sealed charges while traveling in Germany; described by the DOJ as “the first successfully litigated extradition on an antitrust charge”

4

John Bennett/ Canadian citizen

Nov. 14, 2014/ Canada

Aug. 31, 2009, charged with two counts: (1) kickback and fraud conspiracy and (2) major fraud against the United States

Federal Creosote Superfund site investigation

Mar. 16, 2016, trial conviction on two counts for (1) committing major fraud against the United States and (2) conspiring to provide kickbacks and to commit major fraud; sentenced to 63 months in prison, two years of supervised release, a $12,500 fine, and $3.8 million in restitution

Fought extradition for more than five years; trial conviction followed three-week jury trial

5

Yuval Marshak/
Israeli citizen

Oct. 14, 2016/ Bulgaria

Jan. 21 2016, sealed indictment charging two counts of wire fraud, one count of mail fraud, one count of major fraud against the United States, and one count of international money laundering

Foreign Military Financing program investigation

Mar. 13, 2017, pled guilty to mail fraud, two counts of wire fraud, and major fraud against the United States; sentencing is set for June 5, 2017